Out-Law / Your Daily Need-To-Know

Vietnam signs contract for third PPP section of north-south expressway

Out-Law News | 13 Aug 2021 | 9:25 am | 1 min. read

Vietnam’s Ministry of Transport (MoT) has signed a build-operate-transfer (BOT) contract for the third section of the north-south expressway under a public-private partnership (PPP) model.

The contract is for the Cam Lam-Vinh Hao section, which is one of the three PPP sections under the eastern cluster of the north-south expressway. Total investment of VND8.9 trillion ($388.3 million) is being put into the section, with VND3.8 trillion ($164.4m) coming from private investors and VND4.2 trillion ($182.6 million) to be sourced from the government.

The consortium include three local companies in Vietnam –  Deo Ca Group, Deo Ca Construction and 194 Construction Investment, according to IJGlobal.

The north-south expressway project includes 11 sections with a total length of 654 kilometres. Six sections will be funded solely by public money and the other five under the PPP model with a total investment of VND100.8 trillion ($4.3 billion).

Infrastructure expert John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “Inter-regional connectivity is an important component in Vietnam’s industrialisation and economic advancement. The tendering out of this phase of the road network is therefore encouraging, particularly given the capacity of the domestic debt and equity market to undertake the project, given the generally greater capacity of such players to manage the risk sharing in the underlying PPP documentation.”

In June, Vietnam’s government announced it will build a 4,000km expressway under the PPP model across the country by 2030. According to the MoT’s draft 10-year (2021-2030) development plan, the projected cost of the proposed projects is up to VND825 trillion ($35.75 billion).

In March Vietnam announced plans to have 5,000km of expressway roads by 2030 and over 9,000km by 2050.